There is a sharp disagreement between the Nigeria Extractive Industries Transparency Initiative (NEITI) and the Department of Petroleum Resources (DPR) over the exact volume of crude oil produced in Nigeria, especially at the deep offshore fields.
According to NEITI’s executive director, Mr. Orji Ogbonnaya, the actual volume is unknown to anyone.
He said during a courtesy call on the director-general of the Federal Radio Corporation of Nigeria, Mansur Liman in Abuja that the exact amount of crude oil produced in Nigeria had remained unknown because of the absence of meters at wellheads and the lack of capacity to monitor deep offshore fields.
He stated that NEIT agency had in all its oil and gas audit reports recommended that meters be placed on oil wellheads to measure the volume of crude oil produced across the country.
“We do not have capacity to go deep shores to know how much we are producing. As we speak, it is very difficult for any Nigerian to ascertain how much we are actually producing.
“This is one of the challenges that NEITI is dealing with. Because if you do not know how much you are producing how would you know how much you are expected to earn?”
He explained that efforts to reform the petroleum industry had not yielded the needed results because those who benefit from the outdated oil law governing the sector have resisted the passage of the Petroleum Industry Bill (PIB).
“The only law that governs the oil and gas industry in Nigeria currently is the Petroleum Act of 1958. And if you use this law in computations of taxes and royalties based on very old rate, Nigeria losses a lot of revenue,” he said.
He said NEITI had helped in drawing attention to the anomaly, noting that the industry had been operated through regulations, guidelines and pronouncements with no new law since 1958.
He stressed that Nigeria’s failure to update its laws in the sector means when prices go up, the country is unable to derive maximum benefit from the situation.
The executive director also disclosed that no indigenous firm was involved in offshore exploration stressing that all the international oil companies “cannot really protect the interest of the country as much as Nigerians can.”
However, he said “we must concede to those companies, they are doing a great job here because without them there will be no oil industry.”
But DPR countered NEITI’s claim saying every litre of crude produced in the country was adequately captured during the process of extraction.
Spokesman for DPR, Mr. Paul Osu said in a statement that it is the the responsibility of the DPR to monitor and account for crude oil production as basis for determining government’s revenue through royalty payments by operators for sustainable development.
“As a further step to boosting crude accounting process from production to export, DPR recently launched the National Production Monitoring System (NPMS).
“NPMS is an online platform for direct and independent acquisition of production data from oil and gas facilities in Nigeria.
“NPMS as an electronic data transmission tool at production and export terminals is designed to better predict the performance of oil and gas reservoirs and better production forecasting,” he said.
Osu further stated that NPMS’s tool enables the DPR to exercise surveillance, perform production monitoring and data analysis for utilisation and forecasting.
He said the DPR as a business enabler and opportunity house would continue to develop robust and strategic initiatives to ensure timely and accurate payment of rents, royalties, and other revenues due to the government.
